Report regarding the introduction of a general review lighter than statutory audit circulated for comments
A working group appointed by the Ministry of Economic Affairs and Employment has been preparing amendments required in audit legislation for the introduction of a review lighter than a statutory audit. The Ministry will circulate the working group’s report for comments before preparations continue.
The purpose of the planned reform is to bring clarity to and proportionate the provisions regarding audit, and to provide the end users of an audit report more information about the method of the verification. Another objective is to ease the statutory obligations of small companies.
The working group’s report contains a draft regulatory model drawn up in the form of a government proposal. According to it, limited liability companies, limited partnerships, general partnerships and cooperative associations that meet the criteria of a micro-undertaking laid down in the Accounting Act could, under certain conditions, decide on carrying out a general review in the future. The general review would be lighter than the statutory audit. This amendment would not affect the obligation to appoint an auditor, but it would create a lighter statutory alternative to auditing for reviewing financial statements.
The working group was not unanimous, and the report contains a number of dissenting opinions and statements.
Based on an international standard
This new form of review would be based on the International Standard on Review Engagements (ISRE 2400). However, in addition, it would include a national requirement, which would aim to ensure that the reported tax information is correct.
A general review following the ISRE 2400 standard is commonly used in many countries as a voluntary verification service to increase the reliability of financial statements. In a few EU Member States, it is also used as a statutory verification for smaller companies.
The consultation process on the working group’s report will continue until 4 November 2020.
Nadine Hellberg-Lindqvist, Chief Specialist and Secretary of the Working Group, Ministry of Economic Affairs and Employment, tel. +358 29 504 7023
Liisa Huhtala, Senior Ministerial Adviser and Chairperson of the Working Group, Ministry of Economic Affairs and Employment, tel. +358 295 047 062